Pensioners will lose up to £100 in winter fuel payments this year, despite gas
and electricity bills continuing to rise.

The Treasury has confirmed that the over-60s will lose additional payments, which were introduced in 2008 and designed to help them heat their homes while domestic fuel bills are rising.

The payments have been renewed in every Budget since, in the face of high oil prices. The elderly have been able to claim £250 towards winter fuel bills, while those aged 80 or over could claim £400. This year the payments will be reduced to £200 and £300 per household.

Since the start of 2008, the cost of domestic fuel bills has risen by 38 per cent, according to the latest figures from Uswitch.com, the price comparison website. The average dual fuel bill, which includes gas and electricity, is £1,132.

Michelle Mitchell, the charity director of Age UK, said: “We appreciate that the winter fuel payment has been retained in the face of huge financial pressures, but with energy prices continuing to escalate, many older people will find it strange that they will receive less this winter than last.”

This week Ofgem, the energy regulator, criticised the major energy providers for putting up bills when wholesale prices rise, but failing to cut them as quickly when prices fall.

A spokesman for the Treasury said it was keeping to spending plans introduced by Labour, and the additional funding for extra fuel payments was only promised for one more year.

Ros Altmann, director-general of Saga, the lifestyle and insurance company that caters for over-50s, said: “This will come as a real shock for many pensioners, particularly as this Government promised to protect this benefit. Now part of this payment is disappearing, without any real explanation as to why. It seems wrong, and many pensioners will struggle to pay energy bills as a result.”

She added that many pensioners would not be aware that the money would not be available next winter, and criticised how the tax-free payment was delivered.

“This is not a very efficient means for getting these payments to those on the lowest incomes who need this money. If it was rolled into the state pension then at least those on higher incomes would pay tax on these payments,” she said.